U.K. asks money managers to engage with cladding companies after deadly fire
The U.K. government wants the largest money managers to better engage with cladding companies they own so they fix unsafe buildings.
Following an inquiry into the Grenfell Tower fire, which broke out in London in 2017 and killed 72 people, the government sent letters to BlackRock, Vanguard Group and Fidelity Management & Research Co., as well as Norges Bank Investment Management, the manager of the 14.29 trillion Norwegian kroner ($1.38 trillion) Government Pension Fund Global, Oslo, and Caisse des Depots et Consignations, the manager of public pension funds in France, warning of financial consequences for companies and, as a result, their shareholders.
The inquiry found that cladding companies — Kingspan Group, Arconic Corp. and Compagnie de Saint-Gobain — showed poor practices, including selling flammable products and misappropriating safety test results, the government said.
"We ask responsible investors to use their influence to encourage these companies to come forward immediately with a comprehensive financial package for remediation work. It cannot be right that cladding companies continue to profit whilst so many innocent, hardworking people face financial hardship and misery," said Michael Gove, U.K. secretary of state for leveling up, housing and communities, in a news release.
The money managers were warned that if the manufacturers do not come forward with a comprehensive financial package to fix the buildings, then the focus of the department "will be trained upon them."
A spokesman could not be reached to provide further details.